I'm a thirty-year veteran of Wall Street and an outspoken critic of ineffective regulation and an advocate for economic and political sanity. Following a career as an in-house lawyer and industry regulator, I am now in private practice representing member firms, registered persons, Whistleblowers, and defrauded investors. I publish the RRBDlaw.com and the BrokeAndBroker.com websites.

Medically Unnecessary Services

The Indictment alleges that ABC Home Health, Inc. (“ABC”) and Florida Home Health Care Providers, Inc. (“Florida Home Health”) referred Medicare beneficiaries to Drs. Nunez and Gonzalez for medically unnecessary home health care, and that the doctors received illegal kickback payments from the owners and operators of ABC and Florida Home Health in consideration for their signing prescriptions for therapy and home health services. Additionally, the doctors received Medicare payments for home health care services, including office visits and diagnostics tests.

It is further alleged that the defendant nurses, recruiters, and employees also received kickbacks and bribes for recruiting Medicare beneficiaries to be referred for home health services through doctors working with ABC and Florida Home Health (pointedly, Defendant Licet Diaz was charged with distributing kickbacks to patient recruiters on behalf of the owners of ABC and Florida Home Health).

On February 17, 2011, federal prosecutors announced the arrest of the Defendants.

Guilty Pleas

On August 23, 2011, Defendant Jose Nunez, 63, a physician who owned two medical offices, pleaded guilty in federal court in Miami to one count of conspiracy to commit health care fraud. According to his plea, Nunez admitted to having provided home health care and therapy prescription referrals to ABC and Florida Home Health from about January 2006 until March 2009, and that he knew co-conspirators at ABC and Florida Home Health had operated those agencies in order to fraudulently bill Medicare for expensive physical therapy and home health care services (which he and other doctors had prescribed) that were medically unnecessary and/or were never provided.

Federal prosecutors alleged that Nunez furthered the scheme by falsifying patient files with descriptions of non-existent medical conditions, including hand tremors, unsteady gait and poor vision. Those specific symptoms were reported by Nunez in order to create the false impression that the subject patients were unable to self-inject insulin and were homebound, which would qualify them for Medicare home health care benefits. As a result of Nunez’s fraud, Medicare was defrauded to the extent of $1.5 million in home health care services that were medically unnecessary or never even provided.

Nunez is scheduled to be sentenced in December 2011, at which time he faces a maximum prison sentence of 10 years, fines, supervised release, and forfeiture. He faces sentencing in December 2011.

Another Case in Point

In a separate development, on August 23, 2011, after a six-day trial in the Southern District of Florida, a federal jury convicted Judith Negron, 40, owner of the Miami-area mental health care company American Therapeutic Corporation (“ATC”), of 24 felony counts including conspiracy to commit health care fraud, health care fraud, conspiracy to pay and receive illegal health care kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements.

ATC ran partial hospitalization programs (“PHPs”) (a form of intensive treatment for severe mental illness) in seven different locations throughout South Florida and Orlando. Negron and her co-conspirators were further charged with using a related company, American Sleep Institute (ASI), to submit additional fraudulent Medicare claims. It was alleged that Negron’s scheme resulted in the submission of over $205 million in fraudulent claims to Medicare.

Federal prosecutors believe that the jury concluded that Negron, along with ATC co-owners Lawrence Duran and Marianella Valera, defrauded Medicare beginning in 2002 and continuing until they were arrested in October 2010. Previously, in April 2011, Duran and Valera pleaded guilty to all charges against them.

Bribes and Kickbacks

It was alleged that in consideration of the procurement of ineligible patients on behalf of ATC and ASI, that Negron, Duran, Valera and others paid bribes and kickbacks to owners and operators of assisted living facilities (ALFs) and halfway houses, and to patient brokers — in some situations, even the patients received kickbacks.

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With budget cuts resulting in staff cuts to Social Security’s anti fraud staff it’s surprising this doesn’t happen more often. Congress is penny wise and pound short on this. We should spend our money wisely and ensure that all of our agencies staff concerned with fraud, abuse, oversight and waste are adequate to the task so taxpayer money isn’t wasted and lives are not put in jeopardy. Fraud on government agencies is doubly wasteful; not only is money inadvertently paid to the defrauders, more taxpayer money is then spent to investigate, arrest, prosecute and incarcerate the convicted.

With budget cuts resulting in staff cuts to Social Security’s anti fraud staff it’s surprising this doesn’t happen more often.Comment: I think that this is only the tip, the very, very small tip of the iceberg. Clearly there is massive and pervasive Medicare fraud. The investigators and prosecutors in the two cases that I covered have done a superb job and are to be congratulated — and urged to continue the pressure

Congress is penny wise and pound short on this. We should spend our money wisely and ensure that all of our agencies staff concerned with fraud, abuse, oversight and waste are adequate to the task so taxpayer money isn’t wasted and lives are not put in jeopardy. COMMENT: Congress is nothing more than a debating society, so let’s at least agree that it has become a largely useless organization and incapable of taking care of any serious business. That being said, I would respectfully disagree with you to the limited extent that I believe there is substantial waste and corruption in many government agencies, and that simply increasing the budgets for those entities is likely to accomplish little more than pouring water on the desert sands.

Further, we also need to root out the cronyism and incompetency that adles most regulatory and prosecutorial agencies. Nonetheless, we concur that money is wisely spent when it’s put in the hands of dedicated, competent regulators and prosecutors. In the cases that I reported about today, that was clearly the result.

Fraud on government agencies is doubly wasteful; not only is money inadvertently paid to the defrauders, more taxpayer money is then spent to investigate, arrest, prosecute and incarcerate the convicted.COMMENT: We agree.

The problem is much worse than anyone realizes. I work in the medical field and know from personal day-to-day dealing with it. But, for every one person/doctor/clinic that are doing this there are hundreds that are trying to scrape by legally and do the right thing even at the expense of losing money for their practice. This fraud is solvable but it will never be solved so long as the potential elected and the seated elected do not stop dealing with it like a political tool to be elected or re-elected. The rhetoric of this party or that party wants to stop, cut, defund, or reduce Medicare/Medicaid needs to stop because frankly both parties are guilty of it and to date the problem seems to be getting worse and not better. Mrs. Pelosi promised billions in lost revenue collected to offset her push for UHC. This has not nor will it ever come to pass. Another political lie. In the end, with UHC law and so far not repealed if you think the problem is bad now just wait until this law goes into full swing. Americans are going to suffer harshly and not just those receiving the benefits but those of us that have to pay for it.

No, throwing money at a problem is never a solution but neither is asking less than two dozen investigators to find, investigate and turn over for prosecution all Medicare fraud. Staffing should be sufficient in number and training to accomplish the task we’re asking them to do. Otherwise it is like asking one teacher to teach an entire school or one soldier to fight a war. While we can’t afford to waste money by overspending we can’t waste money by under spending either. In this case we need to be like Goldielocks and find a balance of staffing to task ratio that is just right.

We’re still NOT disagreeing on the substantive issue. I’m all for assigning the necessary complement of staff to an investigation and/or prosecution. However, the way government is works is that for every grunt in the field who is doing the actual work there are layers upon layers of cronies, political appointees, and imperious bureaucrats who inject nothing more than unnecessary costs and delays. I have long believed that you could cut something like 25% of the executives from virtually all government agencies and plow those saved salaries into rank-and-file compensation and enhanced technology.

If you go back and carefully read much of my published commentary on this type of situation, you’ll see that I champion the dedicated employees of most government agencies. Unfortunately, when a case is successfully prosecuted, the man or woman on the courthouse steps taking all the credit in front of the televisions is usually some boss who did little, if anything, to develop and advance the case. Rarely, if ever, are the men and women who put in the back-breaking hours fairly credited.

A Broward County doctor defiantly testified that the Justice Department’s Medicare fraud case against him was built on the “lies” of a convicted witness cooperating with the government.

A Miami federal jury must have believed him. Dr. Francisco H. Gonzalez, 78, of Pembroke Pines, was found not guilty Wednesday of accepting thousands of dollars in kickbacks as part of an alleged fraud conspiracy with the operators of two Miami-Dade home healthcare agencies. The agencies billed the Medicare program $25 million for services that patients either didn’t need or receive, prosecutors alleged.

SEE ARTICLE AT http://hcafnews.com/2012/03/08/broward-doctor-acquitted-of-medicare-home-health-fraud-fraud/